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Former Member

Indian Income Tax Depreciation Calculation

Hi

Can any of you please explain/tell me where are the exact SAP configuration settings for the calculation of depreciation calculation as per Indian Income Tax Act by meeting below requirements as per Section 32 of Indian Income Tax Act:

1. If the Asset is being purchased and used in a Financial Year for 180 Days or below 180 Days - Depreciation has to be calculated 50% of Annual Depreciation.

2.If the Asset is being purchased and used in a Financial Year for more than 180 Days - Depreciation has to be calculated 100% of Annual Depreciation.

Waiting for your valuable reply.

Thanks and Regards

P.V.S.R.Gupta

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5 Answers

  • Best Answer
    Aug 20, 2008 at 11:54 AM

    Hi,

    I have no in depth knowledge to india specific tax requirements. But from your description this sounds to me like the normal "half-year convention" in the capitalizaton year. You can specify the period rule 4 (First year convention at half year start date) in the period control assigned to the depreciation key for "acquisitions". This should fulfill your requirements.

    I am sorry, but I do not know if there are already preconfigured depreciation keys delivered by SAP to fulfill that reqiurement. If not I would use my proposal.

    Regards,

    Markus

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    • Former Member Nathan Genez

      Hi Nathan

      Thank you for your reply. And I would further like to narrate the issue that

      1. We are following Group Asset concept for Income Tax Act Depreciation.

      2. Group Asset would have number of asset. (It is not like one Group Asset for one Asset).

      3. Since it is like '1 to many'; we can not give/change the depreciation start date for every asset/s which are coming/having the same Group Asset.

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    Former Member
    Aug 22, 2008 at 10:36 AM

    This message was moderated.

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    Former Member
    Aug 25, 2008 at 09:43 AM

    Asset Created and not attached any Group Asset in the Tax Depreciation area 02. For Tax Dep created one depreciation key GWDV and assigned to the Tax Dep area as mentioned below.(gwdv dep key givein as01)

    I have defined Tax Dep key GWDV with 60% rate of depreciation. Acquired asset in the month of November 2008 i.e. asset put into use in the FY 2008-09 for less than 180 days(then depreciation should calculate at half of the normal rate of dep

    But as per Income tax act depreciation has to calculate on group of assets and for that Specified Depreciation areas (i.e. 02 for Dep as per IT Act)

    spro/f a/cing/asseta/cing/valuation/group of assets

    configure those two steps

    after that Created Group asset in AS21

    While creating the asset masters, under Depreciation areas tab , for Tax Depreciation , I have attached the Group asset number.

    Here depreciation is calculating at Asset group level, but it is calculating for full year even I have acquired one asset in the month of November 2008, which was used for less than 180 days. You can see this depreciation in the group asset explorer

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    Former Member
    Sep 11, 2008 at 05:20 AM

    Thanks to Nathan for the cooperation extended to us.

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    • Former Member Former Member

      Same problem we are facing

      In one group assest 3 assest posted on different dates & if we see depreciation calculation then it takes 1st assest acq.date for all assest (at the time of acq.entry it ask for reference date which is ignore by the system)

      Any solution?

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    Former Member
    Jul 15, 2009 at 05:40 AM

    Dear Gupta,

    I am facing the exactly same issue for calculation of tax depreciation for depreciation area 15 (tax depreciation). Can you please share the solution if you have solved this issue.

    Our reponse on this is highly appreciated.

    Regards

    Kiran Yelamarthy

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